Exhibit 10.19
FOURTH AMENDMENT AND WAIVER TO
CREDIT AGREEMENT
THIS FOURTH AMENDMENT AND WAIVER
TO CREDIT AGREEMENT (this
“ Amendment ”), dated as of September 24,
2008, is by and among MORTON’S OF CHICAGO, INC. , an
Illinois corporation, (the “ Borrower ”),
MORTON’S RESTAURANT GROUP, INC. , a Delaware
corporation (the “ Parent ”), those Subsidiaries
of the Parent identified as a “Guarantor” on the
signature pages hereto (together with the Parent, the “
Guarantors ”), and WACHOVIA BANK, NATIONAL
ASSOCIATION , as administrative agent for the Lenders (as
defined below) under the Credit Agreement (defined below) (in such
capacity, the “ Administrative Agent
”).
WITNESSETH
WHEREAS , the Borrower, the Guarantors, the lenders
party thereto (the “ Lenders ”) and the
Administrative Agent are parties to that certain Credit Agreement
dated as of February 14, 2006, as previously amended, modified
or supplemented by that certain First Amendment to Credit Agreement
dated as of June 1, 2007, that certain Second Amendment to
Credit Agreement dated as of October 9, 2007 and that certain
Third Amendment to Credit Agreement dated as of February 27,
2008 (as amended, supplemented, restated or otherwise modified from
time to time, the “ Credit Agreement ”;
capitalized terms used herein shall have the meanings ascribed
thereto in the Credit Agreement as amended hereby);
WHEREAS , the Borrower desires to join certain Domestic
Subsidiaries set forth on Schedule 1 attached hereto (the
“ Non-Joined Subsidiaries ”) to the Credit
Agreement as Additional Credit Parties as required pursuant to
Section 5.10 of the Credit Agreement;
WHEREAS , to the extent any Non-Joined Subsidiary did
not become a Guarantor as may be required pursuant to
Section 5.10 of the Credit Agreement, an Event of Default may
exist under the Credit Agreement (the “ Potential Event of
Default ”) and the Administrative Agent (on behalf of the
Required Lenders) has agreed to waive any such Potential Event of
Default on a one-time basis;
WHEREAS , the Credit Parties have requested that the
Administrative Agent (on behalf of the Required Lenders) agree to
amend certain provisions of the Credit Agreement as described
herein; and
WHEREAS, the Administrative Agent (on behalf of the
Required Lenders) has agreed to the amendments and are willing to
grant such waiver as requested by the Credit Parties, subject to
the terms and conditions set forth herein.
NOW, THEREFORE
, in consideration of the agreements
hereinafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
AMENDMENT TO CREDIT
AGREEMENT
1.1 Adjusted Leverage
Ratio . The
definition of “Adjusted Leverage Ratio” in
Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
““ Adjusted Leverage
Ratio ” shall mean, with respect to the Parent and its
Subsidiaries on a consolidated basis for the twelve-month period
ending on the last day of any fiscal quarter of the Parent, the
ratio of (a) the sum of (i) Funded Debt of the Parent and
its Subsidiaries (other than Excluded Joint Ventures) on the last
day of such period plus (ii) the product of eight
(8) multiplied by Consolidated Rent Expense (excluding that
portion of Consolidated Rent Expense attributable to Excluded Joint
Ventures) to (b) Consolidated EBITDAR for such
period.”
1.2 Consolidated Fixed
Charges . The
definition of “Consolidated Fixed Charges” in
Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
““ Consolidated Fixed
Charges ” shall mean, for any period, the sum of
(i) the portion of Consolidated Interest Expense (excluding
that portion of Consolidated Interest Expense attributable to
Excluded Joint Ventures) paid or payable in cash during such period
plus (ii) Scheduled Funded Debt Payments (excluding
that portion of Scheduled Funded Debt Payments attributable to
Excluded Joint Ventures) for such period plus
(iii) amounts paid or payable in cash in respect of federal,
state, local and foreign income, value added and similar taxes by
the Parent and its Subsidiaries (other than Excluded Joint
Ventures) on a consolidated basis for such period (reduced by the
amount of any refund of such taxes during such period) plus
(iv) Consolidated Rent Expense (excluding that portion of
Consolidated Rent Expense attributable to Excluded Joint Ventures)
for such period plus (v) dividends, stock repurchases
and other Restricted Payments (in each case, other than Parent
Share Repurchases made pursuant to Section 6.10(d)(i),
6.10(d)(ii) and 6.10(g)) made in cash by the Parent and its
Subsidiaries (other than Excluded Joint Ventures) during such
period, all as determined in accordance with GAAP. For the
avoidance of doubt, separation payments made to Allen Bernstein
pursuant to his Employment Separation Agreement shall not be
included in the calculation of Consolidated Fixed
Charges.”
1.3 Consolidated Net
Income . The
definition of “Consolidated Net Income” in
Section 1.1 of the Credit Agreement is hereby amended by
adding the following sentence to the end thereof:
“Consolidated Net Income shall
include net income attributable to an Excluded Joint Venture only
to the extent such Excluded Joint Venture distributes such net
income to a Credit Party or a Subsidiary (other than an Excluded
Joint Venture).”
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1.4 Excluded Joint
Ventures . Section 1.1 of the Credit Agreement is
hereby amended by adding the following defined term thereto in the
appropriate alphabetical order:
““ Excluded Joint
Venture ” shall mean any (a) Subsidiary of a Credit
Party that is a joint venture between a Credit Party or a
Subsidiary, on one hand, and a third party that is not a Credit
Party, Subsidiary or Affiliate thereof, on the other hand,
established in connection with the start-up, opening and operation
of new restaurant locations and (b) any Subsidiary of an
entity described in clause (a) hereof; provided , that
with respect to any such joint venture or Subsidiary thereof, no
Indebtedness or other obligations of such Excluded Joint Venture or
Subsidiary shall be recourse to any Credit Party or Subsidiary
(other than such Excluded Joint Venture or
Subsidiary).”
1.5 Indebtedness
. Section 6.1(j) of
the Credit Agreement is hereby amended and restated in its entirety
to read as follows:
“(j) (1) Indebtedness of
Excluded Joint Ventures; provided , that with respect to any
such joint venture, no Indebtedness or other obligations of such
Excluded Joint Venture shall be recourse to any Credit Party or
Subsidiary (other than such Excluded Joint Venture) and
(2) other Indebtedness of Foreign Subsidiaries in an aggregate
principal amount at any time outstanding not to exceed
$5,000,000;”
1.6 Restricted Payments
.
(a) Clause (d)(i) of
Section 6.10 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
“(i) repurchase Capital Stock,
or warrants, options or other rights to acquire Capital Stock, of
the Parent in an aggregate amount not to exceed $2,000,000 in any
fiscal year of the Parent and $10,000,000 during the term of this
Agreement and”
(b) Clause (g) of
Section 6.10 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
“(g) the Parent may repurchase
Capital Stock, or warrants, options or other rights to acquire
Capital Stock, of the Parent in an aggregate amount not to exceed
$6,000,000 during the term of this Agreement; provided ,
that with respect to any fiscal year of the Parent, the Parent may
not make any such repurchases pursuant to this clause
(g) during such fiscal year until the Credit Parties have
completely exhausted the baskets for Restricted Payments set forth
in Section 6.10(d)(i) and 6.10(d)(ii) (including any amounts
available thereunder carried forward from previous fiscal years)
for such fiscal year; provided , further , it is
hereby understood and agreed that repurchases of Capital Stock by
the Parent in 2008 shall be applied to the baskets set forth in
clauses 6.10(d)(i) and 6.10(d)(ii) prior to use of the basket for
repurchases of Capital Stock in this clause
6.10(g).”
(c) A new clause (h) is hereby
added to Section 6.10 of the Credit Agreement to read as
follows:
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“(h) an Excluded Joint Venture
may (1) make Restricted Payments ratably to the holders of its
Capital Stock according to their respective ownership interests and
(2) make Restricted Payments to the owners of its Capital
Stock to the extent required by the organizational documents
governing the operation of such Excluded Joint
Venture.”
(d) The last sentence of
Section 6.10 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
“Notwithstanding the
foregoing, the Parent shall not be permitted to repurchase Capital
Stock, or warrants, options or other rights to acquire Capital
Stock, of the Parent, whether pursuant to clause 6.10(d), 6.10(g)
or otherwise, in excess of $20,000,000 during the term of this
Agreement.”
ARTICLE II
WAIVER
2.1 Waiver of Potential Event
of Default .
Notwithstanding the provisions of
the Credit Agreement to the contrary, the Administrative Agent (on
behalf of the Required Lenders) hereby waives (the “
Waiver ”), on a one-time basis, the Potential Event of
Default so long as the Credit Parties shall within thirty days of
the Fourth Amendment Effective Date cause (i) each Non-Joined
Subsidiary to become a Guarantor under the Credit Agreement by way
of execution of a Joinder Agreement and (ii) deliver to the
Administrative Agent substantially the same documentation required
pursuant to Sections 4.1(b)-(e) and 5.12 of the Credit
Agreement and such other documentation as the Administrative Agent
may reasonably request. Failure to comply with the foregoing shall
constitute an Event of Default.
The Waiver shall be effective only
to the extent specifically set forth herein and shall not
(i) be construed as a waiver of any breach or default other
than as specifically waived herein nor as a waiver of any breach or
default of which the Lenders have not been informed by the
Borrower, (ii) affect the rights of the Lenders to demand
compliance by the Borrower with all terms and conditions of the
Credit Agreement in all other instances, (iii) be deemed a
waiver of any transaction or future action on the part of the
Borrower requiring the Lenders’ or Required Lenders’
consent or approval under the Credit Agreement or (iv) except
as waived hereby with respect to the Potential Event of Default, be
deemed or construed to be a waiver or release of, or a limitation
upon, the Administrative Agent’s or the Lenders’
exercise of any rights or remedies under the Credit Agreement or
any other document executed or delivered in connection therewith,
whether arising as a cons
